Central Queensland Production Testing Update
Brisbane, Jan 28, 2022 AEST (ABN Newswire) - State Gas Limited (
ASX:GAS) is pleased to give an update on its current production testing activities underway within its Central Queensland gas projects.
The Company is conducting concurrent programs of work: at its Reid's Dome Project at PL 231 (Reid's Dome Beds coals), to confirm the commerciality of the Project for delivery of new gas supplies into the east coast market; and at its contiguous Rolleston-West Project (Bandanna Formation coals) on the recently issued ATP 2062 to confirm the area for gas development. Gas production testing is currently underway at both of these projects.
Two wells, Rougemont-1 and Rougemont-2, were drilled into the eastern arm of ATP 2062 in mid 2021 as the first wells in the new permit. The wells targeted the Bandanna Formation, a coal formation producing commercially at Arcadia Valley (Santos operated) to the south east, and under development (by Comet Ridge) at Mahalo to the north. Both wells encountered approximately 8m net coal, with good quantities of gas at or near pipeline quality. The permeability at Rougemont-2 was an exceptional 395mD, and the Company commenced a production test of the well on 15 November 2021.
Production testing at Rolleston-West has included ongoing pumping to slowly reduce water levels at Rougemont-2, to minimise the potential for sudden pressure changes to damage to the reservoir. While the water level is currently ~130m above the coals with several further weeks required to expose them, gas production has already commenced at Rougemont-2. Gas flows are steady with consistent growth, and are expected to increase significantly once the coals are fully exposed. Sampling conducted in 2021 indicated gas of pipeline quality at Rougement-2.
At Reid's Dome, State Gas undertook a highly successful production test of the Nyanda-4 well in the first part of 2021. Encouraged by this success and the high gas contents in the area, the Company undertook production enhancement activities at the Nyanda-8 and Serocold-1 wells to establish the potential of these wells to deliver results similar to the Nyanda-4 well. The Nyanda-8 well was jetted and the test recommenced on 28 November 2021, and the Serocold-1 well was sleeved and the test recommenced on 5 December 2021.
Skin damage to the formation at Nyanda-8 appears to be slowly resolving, enabling ever increasing gas volumes to be produced from the well. Despite the formation damage, Nyanda-8 is consistently producing gas at relatively low volumes, with small but steady increases daily. The Company looks forward to further progress from the well.
The Serocold-1 production test started well, producing consistent and growing volumes. Production has temporarily ceased at Serocold-1 as a result of a failure of the pump (due to parted rods). The Company is currently co-ordinating the repair of the pump, with testing expected to re-commence in early February.
State Gas Executive Chairman Mr Richard Cottee expressed his satisfaction with the progress of the Rougemont-2 and Nyanda-8 production tests: "I am very pleased to see the consistent production from the wells. While volumes are initially small, I am expecting we'll see significant increases in gas flows in the coming weeks."
"The Rolleston-West Gas Project includes a significant area of Bandanna Coals in Central Queensland, and we remain excited about its potential in the east coast gas market."
"I am also keen to see how Sercold-1 performs once that well is back on pump and the water lowered," he continued. "Signs were promising prior to the breakdown, so I am expecting good results to come there as well."
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About State Gas Limited
State Gas Limited (ASX:GAS) (OTCMKTS:STGSF) is a Queensland-based gas exploration and development company with highly prospective gas exploration assets located in the southern Bowen Basin. State Gas Limited's mission is to support east coast energy markets through the efficient identification and development of new high quality gas assets.
It will do this by applying an agile, sustainable but low-cost development approach and opportunistically expanding its portfolio in areas that are well located to gas pipeline infrastructure.
State Gas is 100%-owner of the contiguous Reid's Dome (PL-231) and Rolleston-West (ATP 2062) gas projects, both of which contain CSG and conventional gas. The Projects, together some 1,595km2 , are located south of Rolleston, approximately 50 and 30 kilometres respectively from the Queensland Gas Pipeline and interconnected east coast gas network. State Gas intends to accelerate commercialisation of these assets through the application of an innovative virtual pipeline ("VP") solution which will see the Company transport compressed gas by truck to existing pipeline infrastructure or to an end user.
State Gas also holds a 35% interest in ATP 2068 and ATP 2069 in joint venture with Santos QNT Pty Ltd (65%). These two new areas lie adjacent to or in the near vicinity of State Gas and Santos' existing interests in the region, providing for the potential of an alignment in ownership interests across the region over time and enabling synergies in operations and development.
State Gas is also participating in a carbon capture and sequestration initiative with minerals explorer Rockminsolutions Pty Ltd in respect of EPM 27596 which is located on the western border of ATP 2062. This project is investigating the potential of the unique basalts located in the Buckland Basaltic Sequence (located in EPM 27596) to provide a variety of in-situ and ex-situ carbon capture applications.
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